In the first five months of expiration, American companies paid at least $397 million in extra taxes as a result of GSP expiration. Companies in 32 states paid at least $1 million in tariffs from January-May 2021 due to GSP expiration. The map below shows estimated tariffs for products claiming GSP paid by state in that period.

May was the most expensive month of GSP expiration yet both nationally and for 19 states: Alabama, Colorado, Delaware, Georgia, Hawaii, Illinois, Kansas, Massachusetts, Minnesota, Mississippi, Missouri, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Pennsylvania, South Carolina, and Virginia. In three states – Colorado, Kansas, and New Mexico – tariffs paid in May were at least double any of the previous four months.

While many believe the United States has low tariffs, Colorado companies have paid extra tariffs averaging 11.7% due to GSP expiration. Companies in Maine, Montana, New Hampshire, Utah, and Wisconsin have all paid extra tariffs average 7-10%.

The data on tariffs paid is a conservative estimate, and the real figure likely is higher. Why? Estimates only capture products that continued to claim GSP despite expiration. Yet imports of many products that traditionally get GSP have not claimed it in 2021. Tariffs paid on those imports still would be eligible for refunds in the event of a retroactive renewal, but importers would need to file manual requests.

It is critical that Congress renew GSP – with refunds for tariffs paid – as soon as possible. Companies that want to help the Coalition for GSP educate policymakers on who is hurt by expiration (and how) should:

• join the Coalition for GSP
• add their name to the free GSP supporter list
• answer our very short survey on GSP expiration impacts to date

While California is far-and-away the #1 state for GSP savings, Texas edges it out for most tariffs paid this year due to country suspensions – companies in each state have paid up to $18.6 million in extra taxes. Companies in New Jersey are not far behind, having paid up to $18.2 million in extra taxes due to country suspensions.

The costs are driven by different Trump administration actions. Texas is the top state in tariffs paid due to India’s suspension, New Jersey has paid the most due to Turkey’s suspension, and California has paid the most due to Thailand’s partial suspension. The table at the very bottom shows tariffs paid, by country suspension and total, for all states.

Including the tariffs paid due to suspensions, both in 2019 and 2020, drastically changes the state savings trends. Instead of the sea of dark red states with declines of over 20% shown yesterday (and below, right), only a 5 states are likely to have seen such declines without country suspensions. Similarly, there would be savings growth for states in every region of the country instead of limited to the Mountain West.

Swings states, including big states not traditionally in play in Presidential or Senate elections, account for some of the biggest dollar swings. Without country suspensions:

• Texas companies’ savings would’ve increased up to $2.4 million instead of declining by $12.7 million, a $15+ million swing
• Georgia companies’ savings would’ve increased up to $3.1 million instead of declining by $5.8 million, nearly a $9 million swing

In more traditional swings states, maintaining full GSP eligibility for all countries would have mitigated declines likely associated with the Covid-19 pandemic. For example:

• Florida companies’ savings would’ve declined by $4.3 million instead of $12.6 million, an $8+ million swing
• Pennsylvania companies’ savings would’ve declined by $350,000 instead of $8.2 million, nearly an $8 million swing
• Michigan companies’ savings would’ve declined by $3.2 million instead of $8.2 million, an $5+ million swing

Swings were even bigger on a percentage basis in states where GSP savings are traditionally lower:

• Instead of declining by 47%, New Mexico companies’ savings would’ve increased by up to 161%, a 200+ percentage point swing
• Instead of declining by 60%, Minnesota companies’ savings would’ve increased by up to 17%, nearly an 80 percentage point swing

These are real costs to real American companies and workers – many in places that will be hotly contested in the 2020 elections – on top of the challenges related to the Covid-19 pandemic and economic fallout. In addition to congressional reauthorization of GSP, administration decisions to restore lost GSP eligibility would provide significant benefits to struggling American companies.

Lost GSP for India cost American companies an estimated $30.4 million in July, while lost GSP for Turkey cost them another $6.4 million. The impacts of the decisions are clear, as shown in the graph below. Before June, year-over-year GSP rose in 37 straight months.

GSP savings from other countries continued to grow, increasing $11.1 million (18%) from July 2018 to July 2019. Savings on imports from Cambodia grew by $8.1 million, from the Philippines by $2.7 million, and from Indonesia by $1.7 million

But growth from other countries was not able to offset the loss of GSP ineligibility for India and Turkey throughout the country: 41 states plus DC and Puerto Rico saw GSP savings decline from July 2018 to July 2019.

By value, the states with the largest year-over-year savings declines were New Jersey (-$3.4 million), New York (-$3.3 million), Florida (-$2.5 million), Texas (-$2.1 million), Michigan (-$1.3 million), South Carolina (-$1.1 million), Maryland (-$1.0 million), Kentucky (-$976,000), North Carolina (-$858,000), and Pennsylvania (-$852,000).

By percent, the states with the largest year-over-year savings declines were New Mexico (-87%), Louisiana (-78%), Vermont (-75%), Iowa (-72%), and West Virginia (-54%).

Impacts were felt throughout the country, as shown by the map below. Companies in Texas alone paid over $3 million in extra taxes. Tariffs paid exceeded $1 million in eight states, but there can be big impacts on individual businesses even in states with relatively low tariffs paid.

Hardware Renaissance in Santa Fe, New Mexico reports paying over $1,000/week in new tariffs on hand-made bronze and iron door hardware. The 5-person company can’t pass on those costs, so tariffs mean lower margins and less money to reinvest in the business. Since India lost GSP in June, Hardware Renaissance has canceled both hiring and capital investments plans.

What might have been? In March, Hardware Renaissance reported plans for a major expansion that included new finishing and distribution in the United States and expanding exports to Mexico and South America. But that was based on new and planned product lines – all imported under GSP. “This is just so detrimental to business,” says Hardware Renaissance President Anagha Dandekar.

Our April report – How GSP Termination would Hurt American Businesses & Workers – profiled numerous companies like Hardware Renaissance that expected (then-potential) GSP termination to hurt their American jobs and investment plans.

The impacts of the India and Turkey decisions are clear, as shown in the graph below. Year-over-year GSP savings regularly were growing by $10+ million per month. In fact, June marked the first time since April 2016 (37 months) that year-over-year GSP savings declined. The $15 million year-over-year drop was the largest decline in GSP savings since the 2008-2009 financial crisis.

GSP savings from other countries continued to grow, increasing $12.5 million (23%) from June 2018 to June 2019. Savings on imports from Cambodia grew by $7.3 million, from Indonesia by $3.0 million, from Thailand by $1.6 million, and from Burma by $1.3 million.

But growth from other countries was not able to offset the loss of GSP ineligibility for India and Turkey throughout the country: 39 states plus DC and Puerto saw GSP savings decline from June 2018 to June 2018.

By value, the states with the largest year-over-year savings declines were New Jersey (-$4.1 million), Florida (-$3.6 million), Texas (-$2.0 million), New York (-$1.2 million), Illinois (-$1.1 million), Louisiana (-$1.0 million), Michigan (-$942,000), North Carolina (-$882,000), Georgia (-$716,000), and South Carolina (-$512,000).

By percent, the states with the largest year-over-year savings declines were Louisiana (-88%), Nebraska (-82%), Vermont (-76%), Wyoming (-71%), Minnesota (-71%), Mississippi (-68%), New Mexico (-65%), Iowa (-62%), Arkansas (-60%), and Idaho (-54%).

In many of these states, declines were wholly attributable to lost GSP for India and Turkey, leaving little chance that savings will bounce back in July.

Despite overwhelming congressional support for GSP renewal in 2018, the Trump administration has taken actions that will gut GSP benefits for many American companies. Last week, USTR announced its intent to terminate GSP benefits for India and Turkey.

[Given the risks to those countries and others – companies importing under GSP are strongly encouraged to add their name to our free GSP supporter list]

Imports from India and Turkey accounted for over $330 million of those tax savings for American companies in 2018 – and there could be more bad news to come. There are “pending reviews” for other major GSP suppliers such as Indonesia and Thailand that accounted for over $310 million in GSP savings last year. (Decisions could be announced at any time.) As such, less than 40% of GSP benefits came on products where there is no an immediate risk of losing GSP.

For many states, the situation is even more dire: India and Turkey combined to account for more than 60% of GSP savings for companies in Nebraska (77%), New Mexico (70%), North Dakota (64%), Missouri (64%), Iowa (63%), Delaware (63%), and Oklahoma (61%). House Members from those states voted 25-0 in support of the 2018 GSP renewal bill (2 were not present), but their reauthorization support could be undermined by the Admistration’s actions.

When you include countries under review, 43 states (!) had at least half of all GSP savings in 2018 come from countries at risk of losing GSP. In addition to states listed above, over 80% of GSP savings are at risk for companies in Maine (87%), Tennessee (85%), Mississippi (84%), Alaska (83%), and Minnesota (81%). Again, there was unanimous support among voting House Members from those states for the 2018 reauthorization bill.

By comparison, the most tariffs paid in a single month during the last 2-year expiration was “just” $61 million. So the stakes for a swift, retroactive renewal are much, much higher for American companies this time around.

GSP imports were up by 18 percent compared to January 2017. Had companies not been forced to pay them, tariff savings would have increased by 21 percent. Montana and South Carolina were among the states with big increases in GSP imports getting slapped with new tariffs, as shown in the graphic below.

GSP expiration cost Montana companies $46,000 in January. Potential savings were up $38,000 (514 percent) compared to one year earlier. Travel goods from Philippines and fishing lures from Cambodia contributed most to the increases. As noted recently, Montana Fly Company in Colombia Falls had to lay off 3 workers due to higher tariffs associated with GSP expiration.

GSP expiration cost South Carolina companies $1.8 million in January. Potential savings were up $607,000 (49 percent) compared to one year earlier. Plastic resins from South Africa, motorcycles from Thailand, and plaited goods (baskets, wickerwork) from India contributed most to the increases.

In addition to Georgia and North Carolina, companies in 19 other states (plus DC and Puerto Rico) saw potential GSP savings increase by at least 20 percent, including: Alaska, Colorado, Delaware, Florida, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Missouri, Nebraska, Nevada, New Jersey, New Mexico, Texas, Vermont, Virginia, and Wyoming.

Potential savings on GSP imports from Tunisia increased by 115 percent compared to January of last year. Maryland companies alone imported $3.4 million in olive oil claiming GSP in January. GSP would’ve eliminated about $1.2 million in import taxes on monumental and building stone in January had it been in place. Illinois was among the largest importing states.

*** REMINDER: GSP EXPIRED EFFECTIVE JANUARY 1.***

The House passed GSP renewal legislation in February, but the Senate must pass legislation for GSP benefits to resume. Please use our Contact Congress tool to write your Senators about GSP renewal; answer our brief survey on how GSP expiration impacts you, and/or sign up for the free GSP supporter list to show the broad support for renewal.

Some states such as Pennsylvania and Iowa saw much larger increases in GSP imports and savings compared to the previous year, as shown in the graphic below.

GSP saved Pennsylvania companies $2.8 million in July, up over $1.1 million (63 percent) compared to one year earlier. Chromium from Kazakhstan, candy from Thailand, and pesticides from India contributed most to Pennsylvania’s GSP increases.

GSP saved Iowa companies $715,000 in July, up over $283,000 (65 percent) compared to one year earlier. Pesticides from India, gelatin from Brazil, and rubber piping from Turkey contributed most to Iowa’s GSP increases.

In addition to Pennsylvania and Iowa, companies in 21 other states saw GSP savings increase by at least 20 percent, including: Alabama, California, Connecticut, Delaware, Florida, Georgia, Indiana, Maine, Massachusetts, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, Oklahoma, Texas, Virginia, and Wyoming.

Savings on GSP imports from Sri Lanka increased by 51 percent compared to July of last year. Ohio companies’ purchases of activated carbon accounted for nearly $1.4 million GSP imports from Sri Lanka. GSP eliminated about $548,000 in import taxes on packaging plastics in July, with approximately a quarter of those savings coming from imports into South Carolina.

*** REMINDER: GSP EXPIRES IN JUST A FEW MONTHS.***

Please use our Contact Congress page to write your Members today about the need to renew GSP today. That page makes it quick and easy to email both Senators and your Representative. All you need to do is: 1) enter your contact info, 2) enter a few sentences about your company/GSP imports, and 3) click send.

Some states such as New Hampshire and New Mexico saw much larger increases in GSP imports and savings compared to the previous year, as shown in the graphic below.

GSP saved New Hampshire companies $246,000 in May, up over $150,000 (170 percent) compared to one year earlier. Optical equipment from the Philippines and Sri Lanka, ice skates from Thailand, and meter parts from India contributed most to New Hampshire’s GSP increases.

GSP saved New Mexico companies $103,000 million in May, up $47,000 (84 percent) compared to one year earlier. Aluminum products from India, jewelry from the Philippines, and rubber gloves from Thailand contributed most to Virginia’s GSP increases.

In addition to New Hampshire and New Mexico, companies in 13 other states saw GSP savings increase by at least 20 percent, including: Alabama, Delaware, Florida, Indiana, Iowa, Kansas, Louisiana, Montana, Nebraska, Oklahoma, Oregon, Texas, and Virginia.

Savings on GSP imports from Bosnia and Hezegovnia increased by 180 percent compared to May of last year. Louisiana companies’ purchases of silicon accounted for about 40 percent of GSP imports from the country. GSP eliminated about $120,000 in import taxes on keyboards in May, with about a three-quarters of those savings on imports into California.

More monthly GSP import and savings highlights are on our Graphics page.

REMINDER: GSP expires at the end of 2017. Click here to learn about ways to take action and support GSP renewal this year.

Speaking at the U.S.-India Business Council today, Vice President Mike Pence said:

The trade relationship between the United States and India is flourishing.  It’s remarkable to think that not even 20 years ago, two-way trade between our nations was less than $20 billion per year.  But by the end of last year, it had grown by more than 500 percent to an annual $115 billion in trade; and U.S. exports to India now support roughly 200,000 American jobs.

But it is not just U.S. exports to India that support jobs. Duty-free imports from India under the GSP program support American companies, workers, and even exports. As shown in the infographic below:

• GSP benefits for India saved American companies $332 million from August 2015 to April 2017 alone – more than any other country;
• India was the most important source country for a majority of U.S. states in terms of GSP tax savings;
• Nearly half (!) of companies importing under GSP from India export some of those GSP-eligible goods – or products made from them – around the world,
• American companies benefiting from GSP for India are incredibly diverse, though the vast majority are small businesses.

Vice President Pence noted that “the truth is the United States and India we believe have only scratched the surface when it comes to bilateral investment and trade.” We agree, but it would be a mistake to overlook current win-win policies such as the GSP program.